Retirement Plans Newsletter |
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| September 29, 2009 \ Compliance \ Costs \ Administration \ Design \ Policy | ||
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[Guidance Overview]
IRS Provides Assistance for Pension Plan Funding Election Due September 30, 2009
Excerpt: "The Treasury Department and the IRS announced at the end of last week that final regulations will provide automatic approval for defined benefit plans to make a new choice of interest rates for the first plan year beginning in 2010, regardless of what choices were made for earlier plan years. This is important because many pension plans are faced with having to choose the interest rate to use for 2009 by September 30, 2009. Plan sponsors should contact their actuarial advisors to determine the impact of the announcement on employer plans." (McGuireWoods LLP)
[Guidance Overview]
IRS to Automatically Approve New 2010 Pension Discount Rate Elections
Excerpt: "Pension plan sponsors' new discount rate elections for 2010 plan years will be automatically approved -- regardless of elections made in earlier years -- under forthcoming final regulations, according to a Sept. 25 IRS newsletter. With this guidance, pension plan sponsors can finalize 2009 discount rate elections in time to obtain funding certifications, due Sept. 30 for calendar-year plans." (Mercer)
[Guidance Overview]
New Form 5500, Schedule C Reporting Requirements for 2009
Excerpt: "Plan sponsors, plan administrators, and service providers should review the DOL's guidance and the disclosure requirements listed on the Form 5500 and establish procedures necessary to comply with these new requirements for the 2009 reporting year that is currently underway for most plans. For example, plans subject to ERISA are encouraged to develop and implement policies and procedures to track payments made to service providers." (Winston & Strawn)
[Guidance Overview]
DOL Provides Reporting Relief for 403(b) Plans (PDF)
2 pages. Excerpt: "Some 403(b) plan administrators have expressed concerns regarding the difficulty and cost involved in identifying and obtaining financial information on contracts and custodial accounts to which contributions have not been made since 2008 (pre-2009 contracts). On July 20, 2009, the DOL responded to these concerns by providing relief in Field Assistance Bulletin (FAB) 2009-02." (Prudential Pension Analyst)
Impact of The Pension Protection Act on Financial Advice: What Works And What Remains to Be Done?
Excerpt: "In light of the challenges and complexity of managing income for retirees, and the lack of overall financial literacy of our workforce, advice and financial planning services must be effectively delivered to help more participants achieve financial security, today and in retirement. A challenge that emerged in the wake of the Pension Protection Act of 2006 is how to deliver such advice without compromising plan sponsors' fiduciary responsibilities, and without relying on participants to indirectly fund the cost of advice programs through their purchase of ancillary financial products. " (via Pension Research Council)
How Does Retirement Planning Software Handle Post-Retirement Realities?
Excerpt: "This chapter explores retirement planning software that provides individuals and advisors the opportunity to perform a range of calculations to help them in retirement planning. We link results from surveys and research by the Society of Actuaries to show how the software handles post-retirement risks. We find that approaches to managing these risks are often not well-integrated." (via Pension Research Council)
The Declining Role of Private Defined Benefit Pension Plans: Who Is Affected, And How
Excerpt: "Using an empirical distribution of enhanced contributions to DC plans from sponsors freezing their DB plans, we simulate the nominal annuity that could be purchased at retirement age from these enhanced contributions. We then back out the net pension loss experienced by employees in the future." (via Pension Research Council)
Strong Bipartisan Support for Automatic IRA
Excerpt: "A new Hart Research Associates and AARP survey found that 79 percent of adults are in favor of requiring employers with 10 or more workers that have been in business at least 2 years to offer a retirement plan. Employees would be automatically enrolled, but also given an opportunity to opt-out." (U.S. News & World Report)
Detroit Retirement Plan Sued Over Indefensible Investments
Excerpt: "The lawsuit alleges violation of the state Public Employee Retirement System Investment Act, two counts of breach of fiduciary duty, one count of gross negligence and one violation of the Michigan Constitution." (Workforce.com)
Few Savers Plan to Switch to Roth IRA, Survey Says
Excerpt: "Just 7% of survey respondents said they're planning now to convert to a Roth, according to a Fidelity Investments survey in August of 800 people with retirement accounts and household income of $100,000 or higher." (The Wall Street Journal)
Workers Discover 401(k) Plans Are Failing Them in Retirement
Excerpt: "Even before the financial meltdown, financial planners, retirement advisers and public policy experts were citing proof that when it came to providing for any kind of meaningful retirement nest egg, 401(k)s and similar accounts weren't working. At the end of 2006, with the Dow Jones index above 12,000 and booming toward its 14,165 peak the next October, half of private-sector workers in 401(k) plans had account balances of less than $25,000." (The Detroit News)
PBGC Objects to Philadelphia Newspapers Bankrup.tcy Exit Plan
Excerpt: "The Pension Benefit Guaranty Corporation is objecting to Philadelphia Newspapers LLC's plan for restructuring after bankrup.tcy, asking for more details on how the publisher of the Philadelphia Inquirer will address its pension obligations." (PLANSPONSOR.com)
ICMA-RC Introduces New 'It Pays to Save' Web Site
Excerpt: "[The web site] includes: [1] A comprehensive white paper and a video discussion about the research and strategy involved in developing the campaign, featuring ICMA-RC Vice President of Field Sales Keith Sendall. [2] A selection of ready-to-use materials to promote saving among both current retirement plan participants and employees who do not currently participate. [3] Links to other online resources about saving for retirement." (ICMA-RC)
[Opinion]
Statement of Steve Abrecht of the Service Employees International Union Before the ERISA Advisory Council Work Group on Approaches for Retirement Security in the U.S. (PDF)
6 pages. Excerpt: "Our funds, our participants and our sponsoring employers who pay the contributions are going to pay a heavy price for the misdeeds of others and there is no TARP, TALF, PIPP or other program to come to the rescue. This is the new version of trickle down economics and our members, many of them low wage janitors, homecare workers, nursing home workers and food service workers will bear the brunt of the greed that fed the leverage and the housing bubble of the last decade." (Retirement USA)
[Opinion]
Statement of Prof. Norman Stein Before the ERISA Advisory Council Work Group on Approaches for Retirement Security in the U.S. (PDF)
6 pages. Excerpt: "[M]y comments today deal with 401(k) plans, and I will be focusing on two issues: first, why section 401(k) and other voluntary savings plans have failed to implement a coherent vision of retirement policy; and second, why reforms aimed at improving 401(k) plans by making them more like defined benefit plans, and at increasing the number of retirement savings plans by mandating that employers either sponsor a tax-qualified retirement plan or offer payroll-deduction IRAs, are an incomplete solution to the formidable problems of retirement income insecurity." (Retirement USA)
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Links to Items on Executive Comp, Benefits in General
[Guidance Overview]Legal Alert: IRS Approves 'Longevity' Annuity (PDF)
Excerpt: "In Private Letter Ruling 200939018 (June 18, 2009), the Internal Revenue Service (IRS) ruled favorably on an annuity product providing benefits only in the event the annuitant lives to a specified date." (Sutherland)
[Guidance Overview]
SEC Votes to Change Proxy Disclosure Rules
Excerpt: "The Securities and Exchange Commission (SEC) has voted unanimously to propose several important changes to the proxy disclosure rules that could take effect for the 2010 proxy season. The proposal calls for new disclosures about risk and more information about directors and compensation consultants. " (Watson Wyatt)
[Guidance Overview]
FASB Launches New Accounting Standards Codification All Preexisting Non-SEC Accounting Standards Are Superseded (PDF)
2 pages. Excerpt: "The purpose of this letter is to alert compensation professionals to a significant development in the reorganization of U.S. generally accepted accounting principles (GAAP). Beginning with interim and annual periods ending after September 15, 2009, all financial statements will make reference to the Financial Accounting Standards Board's (FASB) new Accounting Standards Codification (ASC or Codification) rather than previously existing accounting standards such as FASB Statement No. 123R. The reorganization does not create new accounting standards or guidance, but the structure of the Codification is significantly different than that of previous accounting standards. This letter provides a brief overview of the Codification and identifies citations that are relevant to executive compensation." (Frederick W. Cook & Co., Inc.)
Towers Perrin U.S. Legislative Tracking Chart -- Retirement and Executive Compensation (PDF)
11 pages; updated September 24, 2009. (Towers Perrin)
Local Area Employee Benefits Estimates for 15 Metropolitan Areas
Excerpt: "This article introduces a set of experimental benefit incidence measures for civilian workers in several large metropolitan areas; the data have a reference period of December 2008. These estimates include worker access to three of the main types of employee benefits for which the NCS publishes estimates: retirement benefits, medical care benefits, and life insurance benefits. Because of the relatively small sample sizes for the metropolitan areas, this article reports only access statistics. Access, as defined by the NCS, is having the benefit available for use." (U.S. Bureau of Labor Statistics)
Xerox to Buy Parent of Buck Consultants for $6.4 Billion
Excerpt: "Xerox Corp. said Monday that it plans to acquire Affiliated Computer Services Inc., the parent company of Buck Consultants L.L.C., in a cash-and-stock transaction valued at $6.4 billion." (Business Insurance)
Issue Brief on Understanding Assumptions Used to Evaluate Social Security's Financial Condition (PDF)
This issue brief describes the major assumptions used in projections of Social Security's financial condition and how variations in the assumptions affect the results. (American Academy of Actuaries)
Executive Compensation in ESOP Companies
The NCEO presents excerpts from the second edition of its book Executive Compensation in ESOP Companies, which features the results of a 2009 survey of companies with employee stock ownership plans (ESOPs) and compares them to non-ESOP companies. (National Center for Employee Ownership (NCEO))
Webcasts and Conferences
Total Rewards Webinar: The Key To Successful Benefits CommunicationNationwide on October 1, 2009
presented by Benefit Software Inc.
Webinar: Low Cost Total Rewards Statements Prepared on Your Own PC
Nationwide on October 14, 2009
presented by Benefit Software Inc.
Webinar: Taking Control of Benefits Administration Costs for New Hires, Qualifying Events, and Open Enrollment
Nationwide on October 1, 2009
presented by Benefit Software Inc.
(Click to post your webcast or conference)
Press Releases
PSCA Releases 52nd Annual Survey of Profit Sharing and 401k PlansProfit Sharing/401(k) Council of America (PSCA)
The Pension Rights Center Mourns the Death of Lisle Carter
Pension Rights Center
Fidelity Study Finds Investors Lack Basic Understanding Of Roth Ira Benefits, As Roth Ira 2010 Conversion Opportunity Nears
Fidelity Investments
MassMutual Earns #1 Rating from Advisors for “Helping Participants Reach Their Retirement Goals”
MassMutual
CEFEX Certifies Montgomery Retirement Plan Advisors
Centre for Fiduciary Excellence (CEFEX)
BrightScope Launches Advisor Central to Provide 401k Plan Advisors and Consultants Tools to Identify and Service Plans
BrightScope
Sutherland Partner Appointed Benefits Tax Counsel with the Treasury Department
Sutherland Asbill & Brennan LLP
Impact Technologies’ New Roth IRA Conversion Analysis Software Simplifies the Process for Financial Service Professionals and Clients
Impact Technologies Group, Inc.
(Click to post your press release)
Employee Benefits Jobs
Client Service Manager (Benefits Payment Group)for JPMorgan
in LOCATION OTHER THAN U.S., OH
Director, Marketing Research & Analysis
for Prudential Financial
in CT
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